8.45 p.m.

Baroness Hamwee moved Amendment No. 194:

Before Clause 64, insert the following new clause--

Power to provide for mandatory licensing scheme

(".--(1) The Secretary of State may by order provide that for the provisions of sections 64 to 69 (registration schemes) there shall be substituted a national mandatory licensing scheme for houses in multiple occupation.
(2) Before making an order under subsection (1), the Secretary of State shall consult local housing authorities and other relevant organisations.
(3) Any order under subsection (1) above shall be made by statutory instrument which shall be subject to approval by resolution of both Houses of Parliament.").

The noble Baroness said: With this amendment we move to the part of the Bill concerned with houses in multiple occupation. This new clause proposes a strengthening of the provisions in this part by providing

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for a national mandatory licensing scheme as distinct from the registration scheme for which the Bill provides, on the basis of a reserved power given to the Secretary of State to bring in such a scheme.

Clauses 64 to 69 of the Bill, replacing certain parts of the 1985 Housing Act, will leave to the discretion of local authorities whether or not they have an HMO registration scheme, whether the scheme adopted is to cover the whole or only part of their area and whether it is to provide tenants of all or only some HMOs with the protection of registration. In addition, the Secretary of State is likely to use his powers when drawing up model registration schemes under the new Section 346B(1) to exclude from registrability at least half of the houses in multiple occupation in the country.

I normally argue for local discretion. It is a measure of the importance of the provisions concerning houses in multiple occupation that, on this occasion, I argue for a national scheme. Safety is not discretionary.

The Committee will be aware of tragedies that have occurred in houses in multiple occupation which, sadly, it appears are less safe even than other houses and units of accommodation in the private rented sector. I say "even" than those because, in general, it is a sector in which there are many problems. I recall some months ago hearing a programme on the radio about unsafe gas boilers and the series of tragedies which had befallen tenants, often young tenants who had been overcome by carbon monoxide poisoning in circumstances which hardly bear repetition. I recall the case of two brothers who died together. Recently, there was the first trial of a landlord, who was found guilty of manslaughter, I believe, as a result of the condition in which he kept a house, leading to the case of a 19 year-old student who was gassed by a defective appliance in her bedsit. As I said, safety should not be discretionary.

The Department of the Environment estimates that there were some 638,000 households of multiple occupation of various types in England last year. One fifth of private rented lettings are unfit for human habitation. The figure is two fifths in this sector. The figure comes from the English House Condition Survey. The risk of death from fire is 28 times higher in HMOs than in the housing stock as a whole and that figure comes from research by the Campaign for Bedsit Rights, supported by the Joseph Rowntree Foundation. The highest proportion of deaths from carbon monoxide poisoning caused by faulty and unserviced domestic gas appliances in the home occurs in private rented accommodation.

If the private rented sector, including HMOs, is to play the role that the Government want, there must be an effective framework to encourage long-term investment and good quality and professional management and to provide consumers with safety, security and affordability. Landlords and investors need a framework which regulates standards in ways which are predictable, stable and avoid unnecessary and needless bureaucracy. It would encourage responsible landlords and investors and drive the unscrupulous out of the market so far as that is possible.

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Local authorities also need a clear and efficient legal framework for enforcing standards and for placing responsibility on landlords to tackle substandard conditions. Above all, existing and prospective tenants of HMOs must be given real guarantees that their homes will be made safe and healthy as soon as possible.

There is widespread support for a national mandatory licensing scheme. In 1994-95, the DoE published a consultation paper on licensing and 76 per cent. of the respondents favoured a new system of licensing. Among local authority respondents, that figure was over 90 per cent. The current regulatory framework is regarded as ripe for replacement, for a number of reasons. It is complex and confusing. I understand that one local authority, Birmingham, has listed 17 different Acts of Parliament and regulations which seek to control conditions in the private rented sector. Inevitably, there are different policies and enforcement practices employed by different local authorities. It is difficult for landlords and tenants to know the standards which are regarded as acceptable. If landlords find the law to be arbitrary, it can be no incentive for them to raise the standards. Tenants are not tenants whose voices can be made to be heard loudly and clearly. In this sector, the tenants are, by definition, those with the least means and, probably, therefore, those with the least will to complain because they fear for their security of tenure as a separate matter from their safety.

The system is inherently inefficient because it depends on tenants making a complaint or on the local authority tracking down every individual substandard property, and that is not easy. As I indicated, the risk of harassment and eviction on the part of a tenant who does complain cannot be underestimated.

Though this may seem a rather petty matter after the plea that I have made, it is worth noting that there are no financial incentives inherent in the current system and that a system which generates income is worth considering because the income that it generates can be used to improve the whole system.

The Government appear to be in favour of a national licensing scheme, according to various comments made in the consultation paper that I mentioned. It argued that it would secure high standards throughout the sector, focus on the types of housing with the worst problems and ensure a more consistent approach. But the Government argue against those points on three bases.

First, they say that powers are already available to local authorities. But, in bringing forward new provisions in the Bill, the Government recognise that the current powers are inadequate. Secondly, they argue that excessive bureaucracy would be created. I believe that varied schemes as between authority and authority in themselves create more bureaucracy. Thirdly, they argue that raising standards to an unrealistically high level would mean that landlords may withdraw accommodation from the market. I understand the point in regard to ensuring that accommodation remains available, but it must meet certain standards of safety and decency.

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The licensing regime which I propose is supported by a wide range of organisations in the voluntary and statutory sectors. The scheme is believed to be one--here I rely on the views of the Joseph Rowntree Foundation--that could pay for itself after five years. I have said that safety should not be discretionary. A fit place to live should not be discretionary and licensing should not be discretionary either. I beg to move.

Lord Dubs: I support Amendment No. 194. The background is that in many of our inner city areas at least there are people who are badly off and facing extremely difficult housing circumstances. It is often difficult for them to find accommodation. Therefore the laws of the market place do not apply. For many years we have had government intervention to provide some measure of protection for people who cannot compete in the market for homes. Among the people who are less well off are those who have to accept accommodation in houses in multiple occupation.

The history of government legislation to give some measure of protection is a long but not a happy one in that we are constantly made aware of the difficulties and inadequacies in the framework which should provide protection for people living in that type of accommodation. The aim should be twofold. First, to provide adequate protection for tenants so that they can live in reasonable safety; and, secondly, to devise a method of doing that which provides maximum encouragement for good landlords and maximum discouragement for bad landlords. Indeed, some of the arguments for better regulation in this area are precisely that the good landlord will welcome it and it is only the bad landlords who will object because they will be caught out or found out.

Under the government scheme in the Bill it is up to each local authority to decide whether or not to introduce a licensing scheme at all. But that is rather random. With the best will in the world local authorities may not get round to it; they may have their own motives for not wishing to be tough in the licensing area. Indeed, the Government's illustrative examples, as given in the standing committee in the other place, suggest that, if a local authority decides to adopt these measures, the Government will help with the scheme but that it will be limited in its scope and exclude a number of houses in multiple occupation. If I am wrong in my assessment of what was said in the other place, I am happy to be corrected.

Having said that, this is a limited amendment. All that it asks the Government to do is accept a provision which would give the Secretary of State a reserve power to bring in a national mandatory licensing scheme. It does not oblige the Secretary of State to do so; it merely gives him the power to do so if at some time in the future he feels it is appropriate.

That is not imposing anything; it is saying that, given the sorry history of legislation in this area and the inadequacy of repeated attempts to do it properly, why not, while we are dealing with the Bill, include a reserve power so that if, even with the best will in the world--

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being generous to the Government--the provisions in the Bill do not work, the Secretary of State can take the reserve powers so that it can be done better?